THE junk-mail postie who first raised the alarm about the murder of a Macleay Island grandmother says he fears he is being painted as a "villain".

Steven Fennell says he believes theft offences from his distant past and his friendship with victim Liselotte Watson, 85, are being used to build a public case against him.

Speaking about the investigation into the brutal murder for the first time, he said police had named no suspects but their actions told a different story.

"The police have a recipe for murder and it's really simple," he told The Sunday Mail, professing his innocence. "I have a criminal record, I gamble and I knew the lady. They need nothing else.

"While they put in print . . . things like that I'm not a suspect, my house is being raided, my family's houses are being raided, all my records have been confiscated, nothing's been returned."

Delivering junk mail on his postie bike to the bay islands, the rapid-talking Mr Fennell is known as the "Lord Mayor" to some locals for his community connections.

He was the first to call police about concerns for the eccentric Mrs Watson, 85, leading to the discovery of her body in her home on November 13.

The murder returned to prominence this week when police revealed a hammer was found dumped at sea alongside other items belonging to the late Mrs Watson.

Police have not confirmed it was the murder weapon or how Mrs Watson died.

Mr Fennell took this week's developments as further confirmation he has been targeted as a potential suspect since the early days of the investigation.

He revealed that when police searched his Macleay Island home soon after the murder they seized up to five hammers, but left several others behind.

"Clearly the hammer in the newspaper is a metal-handled hammer," he said. "So what hammers did they leave at my place? All the wooden-handled hammers.

"There's nothing happened here by accident."

Just as police have been watching him - he says they drive by his home as much as every half hour - Mr Fennell has been closely watching their investigations.

"I knew that Mrs Watson hadn't been shot, strangled or stabbed," said Mr Fennell, who was with police when they found Mrs Watson's body.

"How could I possibly know that?

"Somebody would have heard a gunshot. There was some blood there, I don't believe you get that from strangulation. And by my bedside I had two fishing knives. I don't know what you keep in the house for protection, a baseball bat, a cricket bat, a lump of wood, nothing.

"But when police ignored the knives but in my property report took hammers, it was clear to me that it was a blunt object.

"They didn't take the six pitchforks and nine shovels or anything else that I've accumulated over the years from people that have left the island and given me stuff."

It was "extraordinary" that he had been depicted as a carer for Mrs Watson when they were just friends, he said.

"Nobody would have implicated I was a carer, whether voluntary, paid for or unpaid for.

"The whole point was to paint me as some sort of . . . ' carer villain'."

He called police because Mrs Watson "wasn't there" for their regular Tuesday appointment in which they would usually share a cup of tea. The house was ransacked.

"Why do you think that wasn't in print?

"Because that's not the line. That's not who they've got lined up."

This week he said he had spent the last 20 years helping people with burns, as a survivor of a Brisbane house fire in his youth.

He said the fire was in 1980 or 1981 and he left hospital weighing just 43kg at the time.

"I have documentation where I've been helping people from 1988," he said.

"I'm not a golden boy. I'm simply saying . . . no matter what I was doing I was predisposed to helping burns victims."

Asked whether he thought he was being lined up for murder, he said: "I think Blind Freddy could see that.

"Seriously, we the Australian public are not completely stupid. Each and every time there's been a news item, even with the hammer, they have to put my name in there.

"That's not by coincidence," he said.

"This is to keep it all fresh in the potential jury pool's mind."

Police have previously said the hunt for the Macleay Island killer had gone Australia-wide and confirmed they were following "promising leads" in Tasmania, NSW, Victoria and South Australia.